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(Bloomberg) -- Geneva’s art world suffered another blow to its reputation in November when prosecutors seized pillaged Syrian antiquities from the city’s free port, raising concerns about money laundering and terrorist financing. Now a group of art dealers, lawyers and consultants is fighting back.

Under the banner of the Responsible Art Market Initiative, it will publish a set of guidelines on Thursday to counter illicit activity, including 10 principles for vetting buyers and sellers of art. That will coincide with a conference where Geneva prosecutor Jean-Bernard Schmid and Ricardo Sansonetti, head of financial crime at the Swiss State Secretariat for International Finance, will discuss the remedies.

“The idea is to make sure people understand what the threat is, and it is a real threat facing the art market,” said Mathilde Heaton, a former legal director at auction house Christie’s who helped draft the new guidelines. “We want to play our role in also combating a much wider problem.”

The discovery of looted artifacts from Libya, Yemen and the ancient Syrian city of Palmyra comes seven months after an Amedeo Modigliani painting allegedly stolen by the Nazis surfaced in Geneva’s Free Port. That spurred the city’s leading consultants and lawyers to devise an initiative that could become a model for larger art markets in London and New York.

Market Concerns

“I don’t think Geneva is more or less exposed to the risks but I’m not aware of a British group of lawyers, accountant and auctioneers who have got together to draw up guidelines, and I’m not aware of one in America either,” said Andrew Bodnar, a London-based lawyer who specializes in asset recovery and money laundering cases including art. “The mere fact this is happening shows the concern the Geneva art market has.”

While Switzerland only accounted for 2 percent of the global art market by value in 2015, according to a study last year by Dublin-based Arts Economics, Geneva’s free port is the largest tax-free storage site for art in the world.

The new guidelines come amid the spat between the free port’s largest tenant Yves Bouvier and Russian potash billionaire Dmitry Rybolovlev, who alleges he was overcharged by the Geneva art dealer for paintings, including works by Pablo Picasso and Claude Monet. Rybolovlev contends that Bouvier owed him a fiduciary duty to act in his interests. The art dealer says the Russian was merely a good repeat customer who willingly paid top dollar, adding that there was no broker or agent relationship between the two.

A lack of clear rules helped spawn the dispute, according to Thomas Seydoux, who left Christie’s to set up his own art dealership in Geneva in 2012. It also highlights the need for major art markets to coordinate, he said.

“There’s no way in hell a single dealer can be perfectly aware of the rules and practices and the changes in rules and practices in every single country,” said Seydoux, who plans to attend the conference. “It’s really important that we clarify the roles and the practices of each country and we standardize it, or at least we provide a label of quality good practice across the board.”

To contact the reporter on this story: Hugo Miller in Geneva at hugomiller@bloomberg.net. To contact the editors responsible for this story: Alan Katz at akatz5@bloomberg.net, Dylan Griffiths

©2017 Bloomberg L.P.

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